How Grantmakers Unwittingly Make Life Harder For Nonprofits

“Philanthropy” is generally translated from its Latin roots as “the love of humankind.” That means we automatically assume that all philanthropists are motivated, at least to some degree, ­by a desire to make life better for others. We see this assumption at work across the philanthropic landscape, from generous individuals to ginormous foundations, all working to support nonprofit organizations that, in turn, help millions of people and address almost every kind of need imaginable.

But too often, a philanthropist’s or foundation’s work and effectiveness, while generous in spirit, is confounded by the requirements and processes that the funder adopts — requirements and processes that make their nonprofit partners tear out their hair. It’s not the philanthropist’s intention to make life harder; it simply happens because no one is paying attention. Here are six of the most common examples:

1. Developing complex grant applications. Yes, philanthropists need some key pieces of information to make wise decisions before giving money away, but there’s a limit to how much an individual can process in any meaningful way. Don’t make extra requests for information that no one will look at, and don’t ask for long narratives that no one will read. Don’t ask the same question in multiple ways. While I understand that a five- or six-figure grant might necessitate a more detailed program description and budget, in many cases I’ve seen smaller grants that don’t actually cover the time a nonprofit’s professional staff put into jumping through all the necessary hoops. Keep grantmaking as simple and streamlined as possible.

2. Taking forever to approve a grant. A colleague of mine recently shared a horror story of completing a complex grant application and then having to wait six months to receive word from the funder about whether the grant would be awarded. Delays like this in the grant award process make it difficult for nonprofits to budget for the future and force them to treat what should be dependable support as a possible “surprise” that might come down the road. That’s no way to run a business, or a nonprofit. Once a grant application is received, philanthropists should understand that time is of the essence, especially if the funds are being requested to address a crisis. If the approval process will take more than a month, communicate with applicants throughout so that those who are declined early can direct their attention elsewhere.

3. Making one-time awards to address long-term problems. Most of today’s social challenges are systemic in nature and will require years of work through multiple avenues. That said, I am continually baffled by the number of funders who will make one grant award, feel good about their generosity and move on. The most effective philanthropy is about long-term partnerships, not one-off pats on the back. Whether it’s due to a lack of clear strategy or a false sense of being “fair” to all nonprofits in a community, this kind of hit-and-run philanthropy is never effective and should be replaced by a concerted effort to focus on and commit to longer-term funding.

4. Refusing to fund general operating expenses. Nonprofit programs are sexy for funders; they’re easy to understand, fun to tell others about and can deliver clear outcomes if done well. For nonprofits, however, nothing is as sexy as general operating support. Even the most effective programs can’t operate if the rent isn’t paid, the lights don’t come on and the employees have all been laid off. One of the best practices I’ve seen in the funding world is a foundation that included base general operating support for every grantee in its various funding initiatives. By removing a basic worry, it allowed its nonprofit partners to focus more of their attention and energy on the initiative’s work.

5. Underinvesting in nonprofit capacity. Operating a successful nonprofit requires many different skills, such as strategic thinking, fund-raising, marketing, logistics and expertise in delivering the mission’s services. To operate at peak performance and effectiveness, nonprofits need people who are exceptionally good at all those roles. That means training, professional networks, proper equipment, technology, data and the other areas in which you’d expect any well-run business to invest. Yet the capacity needs of nonprofits are frequently overlooked by funders. Instead, consider what could happen if a nonprofit’s mission were actually powered by the people and resources needed to get the job done!

6. Camping out in the office. I once spoke with a philanthropist who told me that he was an extremely busy man and rarely left his office during the work day. While that may be a great practice if you’re day-trading, it’s a terrible one for philanthropy. Philanthropic investments require face-to-face interactions. It’s how donor and grantee build trust in one another. In this case, the funder’s office was in a relatively remote location, which meant grantees had to travel considerable distance at their own expense and on their own clocks. Hence, that trust wasn’t easy to come by. If you want to really understand the needs, the players and the potential solutions that are at work in your community — and build the trust necessary to tackle them — then get out there!

These are just a few of the most common examples, but I could share many more. How does a philanthropist avoid creating these hurdles? One way to start is to pretend the tables are turned. If you were running a vital operation on a shoestring budget, what would you most want from a funder? Answer that question honestly, and you’re well on your way to being less of a headache and more of a help.

Introducing Our New CEO Springboard Program

Whether you’re a first-time CEO, a new CEO at an established foundation, or a board member who’s made a new CEO hire, you’ve got high expectations. New leadership means a chance to strengthen practices and implement change. It’s an opportunity to build a solid foundation for generations of philanthropic impact.

Kris Putnam-Walkerly will provide confidential strategic assessment, advising and coaching to help new CEOs navigate all aspects of starting a new foundation or leading an established one. Because no two foundations – and no two CEOs – are alike, Kris tailors her approach specifically to the needs of the individual and foundation in question. All activities are designed with the foundation’s ultimate purpose and goals at the forefront.